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Leaving London

Thousands of thirtysomethings and lower-income families are giving up on the capital, or being driven out

But isn’t London growing?

It certainly is. The Greater London Authority recently confirmed that it has returned to its largest ever size – a population of 8.6 million, last recorded on the eve of war in 1939. In the postwar years, thanks to the rise of the car and decades of “suburbanisation”, London’s population began shrinking, and was down to 6.6 million by the 1970s. But since then it has been increasing: one in eight people in the UK now lives in London, and it wields a disproportionate share of the nation’s wealth and power – generating 19% of jobs and 22% of our income. A “dark star” that sucks in “resources, people and energy” is how Professor Tony Travers of the LSE describes it. Yet not everyone in the capital is thriving… or able to stay.

How can London be growing if so many are leaving?

Its overall population is increasing as a result of migration and high birth rates – Barking and Dagenham, in east London, has the highest fertility rate in England. But since 2010, two groups in particular are being shunted from the centre of London to its fringes, or are leaving the city altogether. The first is poor families dependent on either benefits to rent in the private sector, or on social housing; the second is people in their 30s, who, though more affluent, still cannot cope with London’s spiralling house prices, crowded infrastructure and oversubscribed schools.

What is driving them out of London?

The housing shortage. Between 40,000 and 50,000 new homes a year are needed to cater for the rising population, according to experts. Yet only 18,260 were completed last year. This shortfall, and a flood of international investment in property in the capital, has sent rents and property prices soaring just as most people’s wages have stagnated or fallen. Adjusting for inflation, median weekly pay in London fell from £700 in 2010 to £646 in 2014. Inequality has risen all over the UK over the last generation, but nowhere more than in its largest city. In the early 1980s, some two-thirds of Londoners were classed as middle income. Now it’s little more than a third, according to researchers at Oxford University. The numbers of rich and poor, meanwhile, have risen by 80%.

What effect does that have?

Town planners and politicians speak of an alarming “hollowing out” of London society, increasingly divided between those able to enjoy its world-class restaurants and amenities, and those struggling to get by. About 43% of inner-London households are now classed as poor, meaning the city has the highest poverty rate in England (until recently, that was in the Northeast). The Government’s welfare cap of £500 a week per household has hit Londoners especially hard, with further cuts due in this week’s Budget. And the so-called “bedroom tax” has affected more than 40,000 families with a spare room in the capital, with long waiting lists to move into smaller properties. The Independent says that some 50,000 families unable to find social housing have been quietly moved “out of borough” since 2011, with thousands passed on to local authorities in Manchester, Bradford, Hastings, Pembrokeshire, Dover and Plymouth.

What about people in their 30s?

About 60,000 people in their 30s are thought to have left the capital between 2013 and 2014. But actually, there’s nothing new about people quitting London as they get older – in fact, there’s nothing new about people leaving full stop. Since the late 1990s, between 40,000 and 100,000 more people have left the capital each year to move to other parts of the UK than have arrived. (Though international migrants and the city’s high birth rate more than make up the numbers.) People become more likely to leave as they start families and seek bigger houses and quieter neighbourhoods. The current outflow is more noticeable mainly because the capital’s historic outflow actually went into reverse between 2008 and 2013, as London weathered the financial crisis better than the rest of the UK. What newspaper columnists are now drawing attention to is probably no more than the resumption of London’s normal emigration patterns.

So is there any reason to be concerned about the exodus?

Yes. London may boast of its role as the nation’s financial powerhouse, but there are fears for its social fabric. Parts of the city are becoming resorts for the global rich, full of “iceberg houses”, with huge basements dug into the London clay, and apartment blocks bought by overseas investors as “safety-deposit boxes in the sky”. (“London is to the billionaire as the jungles of Sumatra are to the orangutans,” as London Mayor Boris Johnson puts it. “It is their natural habitat.”) But in the process they lose their vitality and sense of community. “Social cleansing”, Johnson calls it, and as residential accommodation becomes irresistible to developers and landlords, the threat extends to local high streets, small businesses and what remains of industry. “Of course there’s a housing crisis,” says Anna Harding, who has rented out artists studios since the 1970s, “but there’s also an employment space crisis”, which risks “the whole ecosystem that makes the city functional”.

Can anything be done to stop it?

Probably not. Residential development in London is far more profitable than any other land use, yet far from impeding the remorseless logic of the market, the Government has recently relaxed the restrictions on converting commercial into residential property. Nor are local authorities, their budgets slashed, likely to resist handsome offers for their housing stock. According to Rowan Moore, The Observer’s architecture critic, a desperate, probably losing, battle is now being fought in 70 London housing estates, affecting 160,000 people, to retain the capital’s traditional, mixed-income communities. The consolation – for those outside the capital at any rate (see box) – is that London’s inequalities, and the relentless pressure of its property market, could be a boon for the rest of the UK.

London’s pain, Brummies’ gain?

“This is a dynamic place, a city where you can build a career,” says Neil Rami, chief executive at Marketing Birmingham – a partnership promoting the city that may be benefiting more than any other from London’s overheated property market and fleeing middle class. Between 2012 and 2013, Britain’s second city welcomed at least 5,000 Londoners (that number is based on NHS registrations, so is probably an underestimate), lured by houses that are half the price and a booming job market. Deutsche Bank has 2,000 employees in Birmingham after moving hundreds of jobs out of the capital. Birmingham will also host the construction headquarters of the new HS2 rail line.

“We are starting to see the benefits of the recovery, particularly for higher-skilled jobs that are being created in cities outside London,” says Ed Cox, director of the IPPR North thinktank. But others warn that some of London’s most distinct but fragile professional communities – particularly in creative industries such as music and art – cannot simply be shipped out and replicated elsewhere. “London works because there’s a market there,” says Anna Harding. “The idea that you can devolve it all is nuts.”